Using my Choppy Market Indicator (10 period) smoothed by a 10 period simple average we were able to eliminate some of the congestion trades. Looks good on this chart but always be aware of what it does historically. This is a form of curve fitting. It’s only worthwhile if it helps the Big Picture. The positive aspect is that it keeps you out of trades that may eventually chop you up but at the same time trends must start somewhere and a really good trend’s genesis is usually a trading range.
Here is a chart of recent market activity in the US Bonds utilizing an intermediate term trend following system. Is Trend Following dead? Let’s hope not. It’s the one approach that may be unaffected by high frequency trading. A congestion filter might be applied to keep from trading in a range. But that might cost you in the long run by delaying entries on true trends.